Namasco Acquires TEMTCO; Divests Canadian Affiliate
Namasco Corp., the North American subsidiary of Klockner & Co. AG, Duisburg, Germany, has acquired the assets of Taylor Equipment & Machine Tool Co., Louisville, Ky.
“The addition of TEMTCO Steel to the Namasco group of companies further enhances the group’s position as one of the leading heavy carbon steel products distributors and value-added plate processors in the U.S. This acquisition further enables Namasco to offer the most complete supply solution to our customers in the energy, infrastructure, transportation, defense/security, mining and industrial equipment sectors operating in the United States,” says Bill Partalis, president and CEO of Namasco.
With the TEMTCO deal following the 2007 acquisitions of Primary Steel, Scan Steel, Premier Steel and Action Steel, Klockner ranks Namasco among the largest distributors of heavy carbon steel products in the United States. During 2008, Namasco is expected to deliver over 1.7 million net tons of carbon and alloy plates, shapes, long products and sheets to over 4,000 customers from its 30 U.S. steel distribution, service center and processing facilities.
While adding to its heavy carbon steel products portfolio, Klockner was also busy divesting one of its subsidiaries. The company agreed to sell its Canadian subsidiary, Namasco Ltd., to Samuel, Son & Co. Ltd., Mississauga, Ont.
Namasco Ltd., based in Burlington, Ont., operates as a preprocessor of flat steel products for the North American auto industry. The company cited changes in the automotive market as the reason Klockner no longer considers it a core business.
Russel’s Sales, Earnings Increase in First Quarter
Russel Metals Inc., Mississauga, Ont., reported a bump in sales and earnings during the first quarter of 2008. Net sales totaled $712 million, an increase of 4.1 percent from the $684 million posted during the same period in 2007. The increase was even more dramatic against the previous quarter, when Russel reported sales of $598 million.
Net earnings for the quarter totaled $29.2 million, a slight improvement from the $28.7 million recorded in the first three months of 2007.
“Since January, mills have increased the price of steel consistently month over month. The cost of metallic inputs, energy and transportation have all dramatically increased, resulting in steel pricing reaching all-time highs in the second quarter of 2008,” says President and CEO Bud Siegel. “Our metals service centers had progressively higher operating profits throughout the first quarter of 2008 as a result of increased pricing, and we anticipate margins to be significantly higher during the second quarter of 2008 due to the ongoing steel price increases.”
First-quarter operating profits for the company’s service centers totaled $32 million, up $7 million from the first quarter of 2007. The service centers’ results strengthened vs. the first and fourth quarters of 2007 due to steel price increases initiated in the first quarter of 2008. Demand, excluding JMS Russel Metals, was consistent with the first quarter of 2007, the company says.
Contributing to Russel’s success was strong volume in the energy tubular products segment serving the oil sands of Alberta and the Rocky Mountain states in the U.S. Revenues from energy tubular products rose $35 million to $214 million during the quarter, compared to the same period in 2007.
Revenues for Russel’s steel distributors segment declined $44 million to $96 million, impacted by both lower imports and lower demand compared to the first quarter of 2007. The economics of importing steel into North America weakened due to strong worldwide steel demand, higher steel prices outside of the region and the weak U.S. dollar, according to company officials.
The barren market for imports is likely to continue, though Siegel sees the gap tightening between North American prices and the offerings from foreign mills.
“You could probably bring in offshore material today and sell at market prices. However, you don’t have a fudge factor,” Siegel says. “The numbers are starting to trend back where its plausible to do it, but there’s still not enough of a margin to keep you from getting caught with high-priced imports if there’s a bit of a downturn.”
McNichols Relocates Boston Service Center
The McNichols Company will relocate its Boston-area service center to North Billerica, Mass. Moving to the newly constructed, 36,850-square-foot space, which is nearly double its former location in Westford, allows the company to increase its fabrication services, offer an expanded inventory and accommodate future growth.
The new location is located with easy access to Route 3 and Interstates 93, 95 and 495, as well as Logan International and Manchester airports.
“We are very pleased to have completed this relocation and major expansion in the Boston area,” says McNichols President Herb Goetschius. “We designed this facility not only to meet the growing needs of our customers, but to serve a greater role as a fabrication specialist.”
The move is the first of two major expansions this year for the $180 million company. McNichols plans to open a new service center in Kansas City this summer.
PNA Group’s Sales Increase 16.4% in 1Q
PNA Group Inc., Atlanta, reported net sales of $474.0 million during the first quarter, jumping 16.4 percent from the previous year’s sales figures. The company also saw significant gains in net income, increasing from $9.4 million to $14.2 million during the quarter.
“The company has had a strong start to 2008 with solid volumes and improving gross margins from those experienced in the second half of 2007. Our gross margin for the March 2008 quarter was 19.0 percent vs. 17.6 percent for the same period in 2007 and 16.0 percent for the December 2007 quarter,” says Maurice S. Nelson Jr., CEO. “This is the primary cause of the increase in our operating margins to 7.6 percent in the first quarter of 2008 from 6.5 percent for the prior-year quarter.”
Looking forward, Nelson sees solid conditions for most of the company’s end markets, particularly infrastructure, industrial and commercial construction and energy. Volume for the first three months of 2008 compared to the same period in the prior year rose 4.4 percent, with long products and plate volumes essentially the same and flat-rolled increasing 13.4 percent.
The Atlanta-based service center company expanded yet again during the first quarter, completing the acquisition of Sugar Steel, Chicago Heights, Ill., for $44.7 million. Sugar Steel specializes in the distribution of carbon structural products, and will join the company’s long products and plate division.
PNA Group now has six operating subsidiaries: Infra-Metals Co., Delta Steel LP, Metals Supply Co. Ltd., Sugar Steel Corp. and Precision Flamecutting & Steel L.P., which comprise the company’s long products and plate segment, and Feralloy Corp., which comprises the flat-rolled segment.
Excluding $33.1 million of inventory related to the Sugar Steel acquisition, the company’s inventory increased by $26.9 million during the first quarter due to significant carbon steel price increases from the mills, Nelson says.
“We are progressing on facility expansions and two new facilities in the long products and plate segment that should allow for increased capacity in key markets in the late part of 2008,” Nelson says. “We will continue, however, to closely monitor our end-markets for changes in demand and, if weakness develops, adjust our inventory levels accordingly.”
American Steel Opening New Portland Facility
American Steel LLC, a wholly owned subsidiary of Reliance Steel & Aluminum Co., is building a new facility at its Portland, Ore., headquarters. The 195,000-square-foot facility will be dedicated to the production of laser-quality, cut-to-length light- and heavy-gauge steel.
To achieve set production goals, American Steel installed technology from the Bradbury Co. a manufacturer of coil handling and cut-to-length equipment. American Steel also has three in-house plasma-cutting machines and six oxy-fuel cutting machines.
“It was important that we have the capability to level high-yield material in thicker and wider widths,” says Nicole Ramsey, American Steel’s sales manager. “This technology will take us well into the future with our customer base.”
The new facility is expected to open this September.
New Acquisitions Spur Sales at Gibraltar
Acquisitions in 2007 contributed a 7 percent increase in sales during first-quarter 2008 for Gibraltar Industries Inc., Buffalo, N.Y. The company reported sales of $326 million during the quarter, up from the $304 million during the same period in 2007.
With the new acquisitions removed, sales were down 5 percent vs. first-quarter 2007, primarily the result of declines in the residential and automotive markets.
Net income for the quarter totaled $6.7 million, an 8.1 percent increase from the $6.2 million recorded during the first three months of 2007.
“Our ability to generate higher first-quarter sales and earnings, in spite of housing starts off 30 percent and the North American auto build down 9 percent compared to the first quarter of 2007, is further evidence of the progress we are making in building a stronger business platform for Gibraltar,” says Brian Lipke, chairman and chief executive officer.
People
John Christie has requested early retirement as president and chief financial officer at Worthington Industries, Columbus, Ohio. Christie will remain with the company through the end of July to provide an orderly close to the end of the company’s fiscal year and to ensure a smooth transition to the new CFO. Christie has served as president since 1999, and added the CFO role in 2003.
Rafael Ocampo has been hired as the director of operations for Dennen Steel Corp. Ocampo will be responsible for all manufacturing activities at the company’s Grand Rapids, Mich., and Burns Harbor, Ind., facilities.
Marmon/Keystone, Butler, Pa., has announced several appointments at facilities across the country. Calvin R. Jennings has been appointed operations manager at Marmon/Keystone’s satellite facility in Fort Worth, Texas; Jack Collins has joined the company’s Charlotte, N.C., branch as warehouse superintendent; Abraham Chavez Jr. has been promoted to operations manager at Little Chute, Wis.; William Lappin has been appointed account manager at the Rochester, N.Y., branch; and Edward McCardell has been promoted to inside sales supervisor in Appleton, Wis.
Rick Schulz has been appointed the operations manager at McNichols Company’s flagship Chicago-area service center. Schulz will oversee the daily warehouse activities at the company’s 80,000-square-foot location in Des Plaines, Ill.
Albert Orengo has been promoted to general manager of Main Steel’s Wheeling, Ill., facility. Orengo has been employed by Main Steel for 17 years, most recently as assistant general manager of the company’s Bartlett, Ill., location.
